by Luke Kawa
Kevin O'Leary is out to carve a niche for himself in the world of exchange-traded funds.
The chairman of O'Shares Investments and Shark Tank personality has filed a prospectus with the Securities and Exchange Commission to launch 17 ETFs. All the proposed offerings have “quality” in the name and would employ a passive investing approach. The investable universe of these funds includes emerging-market equities, small-cap U.S. stocks, preferred shares, and even corporate credit.
“It's rare for an indie shop like this to put this many funds on one filing,” said Eric Balchunas, ETF analyst at Bloomberg Intelligence.
O'Leary's celebrity status and the application of smart-beta strategies to fixed income could help the Canadian businessman differentiate himself and attract assets in what's becoming a crowded ETF space, with roughly 60 issuers in the U.S. The “quality” designation suggests O'Leary's ETFs will put a priority on conservative factors, which are in vogue as the bull market enters its eighth year.
“It looks like he's going with what he knows, taking one concept and applying it to every single asset class,” Balchunas said. “Fixed income hasn't been smart beta-ized yet, so there's a real opportunity there to be on the cutting edge.”
O'Shares' most popular current offering, the FTSE U.S. Quality Dividend ETF, has $240.5-million in assets and has outperformed the S&P 500 so far this year:
Details on expense ratios or fees for O'Shares' proposed ETFs weren't included in the preliminary prospectus. The FTSE U.S. Quality Dividend ETF has an expense ratio of 0.48%, which is roughly in line with that of other smart beta offerings.
Earlier this year, O'Leary indicated that he was considering a run for the leadership of the Conservative Party of Canada after former Prime Minister Stephen Harper's Tories lost the 2015 federal election to the Liberals, led by Justin Trudeau.
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